BHP, COSCO sign contracts for ammonia-powered vessels

Australian mining giant BHP has signed contracts with China's COSCO Shipping Bulk Co., Ltd., a subsidiary of the world's largest shipping company COSCO Shipping, for the charter of two ammonia dual-fuelled Newcastlemax bulk carriers, according to BHP's announcement on July 2.

Under the five-year time charter contracts, the two vessels are expected to be delivered from 2028, primarily for transporting iron ore from Western Australia to Northeast Asia, BHP said.

BHP also estimates that the vessels could cut greenhouse gas (GHG) emissions by at least 50% and up to 95% on a per voyage basis, compared to a conventionally fuelled vessel. The miner is committed to applying zero GHG emissions fuels to 10% of its product shipments on company-chartered vessels by 2030, and these new contracts mark an important step to achieve that goal, it noted.

Newcastlemax vessels, with a deadweight capacity of 200,000–219,999 DWT, represent the newer evolution of Capesize bulk carriers, notes China's Xinge Marine News. Initially designed for coal transport through the Newcastle port in Australia, these vessels have now become a mainstream choice for transporting iron ore, coal, and bauxite, it notes.

Where the ships under the charter contracts are being built was not revealed but it is known that Beihai Shipbuilding, a subsidiary of China State Shipbuilding Corp, has secured orders for Newcastlemax vessels from COSCO Shipping.

Ammonia is one of the most promising marine fuels with zero-carbon potential, and the new partnership between BHP and COSCO Shipping reflects the real progress being made to the "Australia-China Green Shipping Corridor", said COSCO Shipping Vice President, Ji Lin. Ammonia has gained popularity among global ore miners and shipping companies in recent years, as decarbonizing the shipping industry has become the new trend, Mysteel Global notes.

Last August, COSCO Shipping and Fortescue Metals Group (FMG) inked a non-binding Memorandum of Understand to collaborate on constructing and deploying ammonia-powered vessels, as reported. More recently, FMG and the CMB.TECH also signed an agreement in April this year to deploy a new ammonia-powered vessels to transport iron ore from Australia's Pilbara region to China and other markets globally, as reported.

Written by Irene Zhuang, zhuangailing@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com